Payday loans have an intense gravitational pull and are characterized by colossal interest rates that often to leave borrowers in a worse financial state than before they took the loan; especially when borrowing from predatory lenders who won’t hesitate to take advantage of consumers desperately in need of money.

Kalman writes:

“New rules must include limits on repeat borrowing and duration of indebtedness to keep predatory lenders from pushing consumers into increased risk of losing bank accounts, their foothold into the mainstream financial system, and of entering bankruptcy.”

In many instances, borrowers turn to payday loans during times of financial hardship. Taking one step forward and three steps back, these borrowers eventually rely on the same alternatives that were available to them before they took out the payday loan (assistance from friends/family, re-budgeting finances, cutting back on spending), just to recover from the debt incurred through the payday loan itself.

But with payday loan interest rates averaging around 391%, it’s no surprise that borrowers who fall into the “payday loan trap” have tremendous difficulty getting out of it.

Because of these trends, Kalman also urges the CFPB to “instate specific protections when lenders have access to borrower bank accounts.”

When lenders have direct access to a borrower’s bank account, they will often take funds as soon as the borrower’s next paycheck is deposited. This action forces the borrower in a corner, which may leave them with far less money than they need to cover necessities, such as food costs and utility bills.

Kalman concludes:

“Payday lenders have a long history of dodging regulation that targets abusive practice. To ensure any new rule is effective… it must be comprehensive to protect against attempted evasions. It cannot allow any loopholes or sanction high-cost, poorly underwritten loans. The CFPB must add protections for borrowers and not undermine strong, existing state laws that have helped curb the debt trap.”

How do you feel about Kalman’s petition to the CFPB? Do you believe we need to apply tougher standards to payday lenders? Please, let us know your thoughts in the comments.

Are you being harassed by robocalls? You may be entitled to as much as $500 to $1,500 per call.

In a recent appearance on Eye Opener (PHL17), our own Craig T. Kimmel took a moment to discuss robocalls, how they affect consumers, and what consumers can do when they’re being abused or harassed by these types of calls.

“The Telephone Collection Practices Act forbids certain types of calling. Automated calling, what we call ‘robocalls,’ calls without consent or permission, or calls when you have revoked permission [for these calls to be made to you].”

Violations include calls from debt collectors, marketers, advertisers, survey takers, charities, when you never gave permission for your cell phone number to be called.

When you’re making this kind of claim, we typically just need to show that the call came in, that it originated from a number that was not authorized to call, and that the number was dialed using a computer or that any automated voicemail messages were left by an originator who never had permission to call.

Debt collectors and marketers use phones more now than ever to collect and make money. This does not permit them to violate your rights as a consumer. If you are being harassed by robocalls, telemarketing calls, or debt collection calls to your cellphone, contact us at 1-800-NOT-FAIR (1-800-668-3247) or email us for a FREE case review.

As we all know, credit cards in their current state are prone to exploitation. This can cause major headaches for consumers hoping to keep their identities and credit lines out of the hands of cyber crooks.

The credit card in your wallet works using a magnetic strip and – in select cards – an embedded microchip. Time and again, this technology has been exploited by hackers, and surprisingly, it’s changed very little over the years, leaving consumers exposed to any thief with the desire and tech savvy to rob them of the information stored on their card.

However, science and research have revealed a new solution that will potentially provide consumers with credit and debit cards that are literally impossible to hack, all thanks to quantum physics.

Using a quantum security authentication (or QSA) system, a “nanoparticle strip” on the card would be “zapped with a laser” in a way that would make it fundamentally impossible to crack. It’s a difficult concept for most non-physicists to grasp, but in its simplest terms, the process works by “harnessing the qualities of light in the quantum state, in which photons can exist in multiple places at the same time.”

In short, hackers will never be able to recreate the pattern placed on the card. During testing, “attackers” were completely unable to decode the incident light pulse, meaning they could not digitally recreate the generated key, even if they knew what it was beforehand.

Additionally, QSA technology does not depend on stored data or unproven mathematical assumptions, and – according to researchers – its implementation with current technology should be fairly straightforward.

That’s right. The same team behind this project believes that the QSA system could be ready for use within a reasonable timeframe, not too far from today. Until then, we suggest keeping a careful eye on your current accounts, monitoring your account activity regularly.

Thousands of Spanish-speaking consumers were targeted by debt collectors Centro Natural Corp. and Sumore LLC, who tricked them into paying over $2 million in phantom debts.

A “phantom debt” is any claim for payment which is too old to collect, was never owed to begin with, or which is unsupported by proof sufficient to establish its validity.

According to the Federal Trade Commission (FTC), the named companies unlawfully collected phantom debts since 2011 – perhaps longer – and used harassing and abusive techniques to get consumers to pay. Typically, they referenced debts of $3,000 to $9,000, then offered to “settle” for a lesser amount, often in the hundreds of dollars.

The two companies were further accused of getting consumers to purchase services that could “settle” their debt and were even said to pose as government officials, ignoring the National Do Not Call Registry while harassing consumers and occasionally using vulgar language when their demands were not immediately met.

According to the FTC, in cases where the debts were legitimate, Centro Natural Corp. and Sumore LLC would still violate the FDCPA (Fair Debt Collection Practices Act), the FTC Act, and the FTC’s Telemarketing Sales Rule.

It is unlawful for debt collectors to harass or to use profane or threatening language when calling anyone to collect a debt. It is also unlawful to mislead consumers by falsely identifying themselves or posing as government officials.

While the FTC was able to halt this unlawful operation, some or many of the same practices are used by “legitimate” debt collectors who fail to comply with their legal obligations of fairness, civility, and honesty towards consumers. The FDCPA applies to ALL debt collection activities and protects consumers with powerful tools to stop abuse, collect statutory damages from the collectors, and obtain payment of all attorney fees and costs a consumer’s lawyer expends to help the consumer.

If you received repeated, threatening, or harassing phone calls within the last 12 months for a “phantom debt” or any other debt, contact an experienced FDPCA consumer lawyer to put an end to debt collection calls for good.

If you follow the Credit Law Blog, you’re probably already aware that this is a direct violation of the FDCPA (Fair Debt Collection Practices Act). The FDCPA states that debt collectors are forbidden to “Lie or falsely imply, in any communication, that the collector is a government agency, or serving you with papers, or that you are subject to arrest, or that you have committed a crime.”

According to ABC News, these calls are part of a growing scam seen throughout the United States. Deceptive debt collectors are calling people, attempting to convince them they’ve commuted a crime, harassing them until they pay debts that – in some cases – may not even exist. While the federal government is cracking down on phony debt collection agencies, thousands of people are being robbed of millions of dollars every year.

Legitimate, law-abiding debt collection agencies do exist. But these agencies should also have a strong understanding of their obligations under the FDCPA. If anyone is calling you, threatening legal action over a debt you may or may not owe, it’s time to contact a qualified consumer law attorney and put a stop to debt collection calls.

We’ve included the original broadcast as seen on ABC News below. If you find yourself in a similar situation, just remember: You have specific rights under the FDCPA, and it is against the law for any debt collector to violate these rights. If they do, you may be entitled to compensation under federal law.

The debt stems from a Capital One credit card Franks used after the passing of his wife eight years ago. While Franks would like to settle the debt, it has proven to be more difficult than originally expected. Regardless, he didn’t think he’d owe more than three times the debt’s original amount.

While it’s not uncommon for debt collectors to purchase debt from lenders at significantly less than the total owed, in many cases just pennies on the dollar, the firm in question – Brumbaugh and Quandahl LLC – would not reveal how it came to the $15,517 figure it’s seeking, or why it refused to consider any of his lump sum payment offers, according to The Des Moines Register.

The Des Moines Register notes that Brumbaugh and Quandahl has a fair share of consumer complaints. According to the publication, there are 55 complaints by Nebraska’s attorney general (five of which were made in the last two years), along with 17 complaints to Iowa’s attorney general and the Better Business Bureau. The firm has also been named in a class action alleging violations of the Fair Debt Collection Practices Act (FCDPA), as well as the Nebraska Consumer Protection Act.

The last time Capital One pursued Franks for the debt was in 2008, when the bank claimed $7,365. It wasn’t until recently that Franks received a letter from Brumbaugh and Quandahl demanding that he pay a sum of $1,293 over the course of the next 11 months, $239 more than his monthly disability check.

Franks has been in touch with the Consumer Protection Division of the Iowa Attorney General, who notes that there is a five-year statute of limitations on such collections if an oral agreement is involved, with a 10-year limitation on written agreements.

If you find yourself harassed or battered by debt collectors for an old or excessive credit card debt, it may be time to consult a consumer law attorney such as our firm. We’ll help determine whether the debt is legally valid, demanding all documentation of the original debt. We can also use the law to stop illegal and abusive debt collection tactics. Now is the time to get your free case review and speak with one of our lawyers.

]]>http://www.creditlaw.com/blog/iowa-mans-overdue-debt-tripled-by-debt-collector/feed/0Second Circuit Reverses Ruling in TCPA ‘Express Prior Consent’ Casehttp://www.creditlaw.com/blog/second-circuit-reverses-ruling-in-tcpa-express-prior-consent-case
http://www.creditlaw.com/blog/second-circuit-reverses-ruling-in-tcpa-express-prior-consent-case#commentsFri, 24 Oct 2014 18:33:27 +0000http://www.creditlaw.com/blog/?p=2848Read More]]>When Albert Nigro contacted National Grid to end electrical service to his deceased mother-in-law’s New York home, he never expected to be bombarded with automated collection calls for someone else’s debt.

So how does a man wind up in the sights of a debt collector’s auto-dialer for a bill that isn’t his own?

During his call with the power company, Nigro gave his cellphone number to Mercantile Adjustment Bureau (MAB), an agency acting on the behalf of National Grid. As a result, MAB called Nigro 72 times between April 2010 and January 2011, attempting to collect a $68 delinquency lingering on his mother-in-law’s account – an account that was not in his name.

It’s easy to imagine what a shock this must have been to Nigro. Not only was he completely unaware of the debt; he never gave MAB consent to contact his cellphone to collect on any debt to begin with.

In response, Nigro filed a suit alleging that Mercantile Adjustment Bureau was in violation of the Telephone Consumer Protection Act (TCPA). The TCPA prohibits automatically dialed or pre-recorded collection calls to cellphones unless they are made with the consumer’s “prior express consent.”

Although a district judge ruled in favor of MAB, citing a FCC rule-making order from 1992, Nigro proceeded to appeal his case with the Second Circuit. This time, the judges contacted the FCC for clarification.

The FCC’s response? MAB’s debt collection calls did – in fact – violate the TCPA, and the district court’s ruling should be reversed on appeal. The FCC went on to explain that “prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and… was provided during the transaction that resulted in the debt owed.” As Nigro’s number was not given to MAB in the context of the original transaction, the ruling was reversed.

While this is an exceptional situation, it demonstrates how a strong understanding of the current TCPA statutes can protect consumers from unauthorized and illegal debt collection tactics. When you’re dealing with dozens of debt collection calls – automated or otherwise – it’s time to speak with an attorney and defend your rights.

Unfortunately, this was the reality for nearly 600,000 Americans when Kirit Patel’s company, Broadway Global Master, posed as a debt collection agency and made over 2.7 million phone calls between 2010 and 2012, fraudulently collecting more than $5.2 million from unsuspecting consumers.

Operating from call center in India, Patel and Broadway Global Master had agents calling consumers to collect on debts that – according to prosecutors and the Federal Trade Commission (FTC) – didn’t exist in the first place.

It wasn’t until the FTC caught on to Patel’s shady debt collection practices that it put a halt to his unlawful activity, freezing his operation and seizing the company’s assets, so it could further its investigation.

Patel and Broadway Global Master were in violation of the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from harassing consumers and posing as government officials – including police officers and representatives from government agencies – which were standard collection tactics at Broadway Global Master.

On top of it all, back-to-back calls and accompanying threats were all too common. It was reported that one consumer received a threat that her children would be taken from her if she did not pay what the debt collector claimed she owed.

Ultimately, the debts under collection by Broadway Global Master were fake, and the whole operation was determined to be a scam. While a guilty plea may lighten his sentence, Patel could face as much as a $250,000 fine and 20 years in prison for his crimes.

While there are plenty of legitimate debt collection agencies, all debt collectors are required by law to respect your FDCPA rights. If you receive harassing, threatening, or excessive phone calls from any person or agency attempting to collect on a debt, it’s important to have your case reviewed by one of our consumer law attorneys. You have explicit rights under the FDCPA, and you may be entitled to compensation if those rights have been violated.

]]>http://www.creditlaw.com/blog/fake-debt-collector-scams-thousands-pleads-guilty/feed/0Pressler & Pressler Hit with Class Actionhttp://www.creditlaw.com/blog/pressler-hit-with-class-action
http://www.creditlaw.com/blog/pressler-hit-with-class-action#commentsFri, 17 Oct 2014 15:33:43 +0000http://www.creditlaw.com/blog/?p=2841Read More]]>In a recent article published by NJ Law Journal, it was reported that a putative class action has been filed against the largest collections firm in New Jersey, Pressler & Pressler.

This news comes in the wake of a recent ruling that determined “four-seconds” is not enough time to be considered “meaningful attorney review” under the FDCPA.

The class action stems from complaints originally declared in the case of Bock v. Pressler & Pressler. Here it was found that a single attorney would review and sign hundreds of complaints in a day, neglecting to involve other lawyers in the pre-filing process.

“The case law is sparse, and it is possible for reasonable people to disagree as to what constitutes reasonable attorney review. But whatever reasonable attorney review may be, a four-second scan is not it.”

Pressler & Pressler was discovered to be in violation of the Fair Debt Collection Practices Act, as the complaints filed by the firm implied almost no attorney involvement.

According to NJ Law Journal, Pressler & Pressler presented the argument that “the rules require only a belief that the allegations are likely to have evidentiary support,” explaining that an “attorney’s good-faith belief cannot simply be willed into existence, but must be formed after an inquiry.”

The case of Bock v. Pressler & Pressler originated with a debt that was purchased by Midland Funding LLC, who employed Pressler & Pressler to collect the debt. After presenting Daniel Bock, Jr. with a collection letter, Pressler & Pressler proceeded to file a complaint against him with the Superior Court of New Jersey.

As you can see, the FDCPA works to defend consumers from negligent and illegal debt collection practices. Because Pressler & Pressler did not have an attorney meaningfully review the case before sending a collection letter, it was ruled that the firm’s actions were both false and misleading. When struggling with debt collectors, it’s important that you fully understand your rights under the FDCPA and other federal statutes.

If you’re dealing with a debt collector who you feel may be in violation of the FDCPA, it is suggested that you meet with one of our consumer law attorneys right away. We can help determine whether your rights have been violated, as you may be entitled to compensation under the federal law. Email us for your free case review.

]]>http://www.creditlaw.com/blog/pressler-hit-with-class-action/feed/0Obama Admin Seeks to Expand MLA, Reduce Predatory Lendinghttp://www.creditlaw.com/blog/obama-admin-seeks-to-expand-mla-reduce-predatory-lending
http://www.creditlaw.com/blog/obama-admin-seeks-to-expand-mla-reduce-predatory-lending#commentsThu, 16 Oct 2014 20:52:14 +0000http://www.creditlaw.com/blog/?p=2839Read More]]>The Obama Administration and the U.S. Department of Defense (DoD) are aiming to curtail predatory lending practices by expanding the protections offered to active service members and their families.

These actions are intended to broaden the Military Lending Act (MLA), crushing loopholes in current statutes by allowing it to cover all forms of payday, refund anticipation, and vehicle title loans. Additionally, the Obama Administration hopes to expand the MLA’s protections to include installment loans, deposit advance loans, credit cards, and unsecured open-end lines of credit.

While changes to the Military Lending Act strictly apply to active duty service members, the Consumer Financial Protection Bureau (CFPB) is looking at ways to approach similar practices as they affect civilians, such as high-interest payday loans.

A payday loan is a small sum of money that’s lent to a borrower with the understanding that it will be paid in full when the borrower gets his or her next paycheck. Every year, millions of Americans take out payday loans, including members of the U.S. military. Due to the nature of these loans, the interest rates can be staggering, often nearing 400%.

While stricter lending caps and more involved underwriting practices could make a world of difference to millions of Americans, it may be some time before we seen anything put into action. Lenders will continue to fight alterations to the existing policies, because such changes are a threat to their own ability to prey on borrowers. Because of this, it’s now more important than ever for consumers to pay close attention to the conditions that apply to the loans they borrow.

Regardless of whether you’re a civilian or an active member of the military, you still have explicit rights under federal law. Remember, creditors and debt collectors are obligated to respect these rights, no matter how much you may owe.

What are your thoughts? Do you think the policies surrounding payday loans and similar, high-interest loans need to change? Let us know in the comments.